Foreign Office wasting millions on embassies while neglecting security, says watchdog

The Foreign Office is wasting millions every year on expansive embassy buildings around the world while cutting funding for crucial security measures in high-risk countries, according to the National Audit Office. The reported scale of mismanagement of the Foreign Office's £1.6bn estate is revealed in an NAO report that says ministers have "no clear strategy" for the 4,062 embassies and residential homes for diplomats in 279 locations across the world. The report describes as "inaccurate and incomplete" the data that officials in London hold on the global estate, and reveals a £57m overrun on the £250m capital building programme since 2002. The best figures the auditors could find suggested that more than two-thirds of staff overseas were residing in offices that were 50% larger than the guidelines suggest they need be. Six in 10 of the offices around the world had unused space. In New York the consulate general offices are on two floors leased for £1.4m a year, with surplus office space across both floors. The Foreign Office signed a another 15-year lease in 2009, after the landlord said floors would only be let in their entirety. In many countries embassies are forced to maintain excessively large premises, donated by their host governments, to avoid diplomatic rows. In other parts of the world the service is struggling. The rapidly growing influence of China has seen staff numbers there increase by 23% between 2006 and 2009, straining office accommodation. "As a result, posts stopped or delayed the arrival of further staff. We found current office spaces were of poor quality with few facilities," the report says. The document also reveals the cuts the Foreign Office is facing. After four years of increases in capital spending, this year's allocation dropped by 17% due to "revised budgetary priorities". The Foreign Office has faced falling budgets owing to the slump in the value of sterling across the world. "As a result, nine projects (with a total cost of £87m) planned for 2009-10, have been delayed until 2010-11. Four of these were security-driven projects, and the FCO plans to manage the security risks in the interim," the report says. "This can be due to a lack of funds." The future of the Foreign and Commonwealth Office in Kabul is "threatened" following its failure to get an agreement from other government departments to start planning a high-security replacement for its offices, the lease of which runs out in 2013, the report finds. A third of staff in the building are from other government departments but the Foreign Office had failed to persuade ministers in the other departments to share the costs by its own deadline of September 2008. "No agreement has yet been reached, threatening the project's viability," it says. Amyas Morse, head of the NAO, said: "Although the department has begun to remedy some of the shortcomings we identified and has started work on its strategy for managing the estate, it still needs to get the basics right. It needs to lay out the priorities for its overseas estate and work out how to get more robust information. While there are examples of good practice at individual posts, the department needs to spread this across the whole estate if it is to make real efficiencies." Edward Leigh, the Tory MP who chairs the Commons public accounts committee, said: "Over half of posts still have unused office space or staff accommodation. It is disappointing that the Foreign Office is not making better use of this space by sharing with other government departments where feasible, as it has an explicit aim to provide a network for other UK government bodies overseas." A spokesman for the Foreign Office, said: "We welcome the NAO's report. As it notes, operating a global estate for the FCO and the rest of government in 279 cities around the world is far from straightforward. We nonetheless take seriously the finding that we can achieve better value for money. We are taking forward a number of steps to improve the efficient management of our estate, including recruiting more specialist staff, better project governance arrangements, and a clearer strategy. We are also looking at improved management information and clearer charging arrangements for other users of our buildings."